What do L&D professionals can borrow from psychology, sociology, and plain-old curiosity to crack the learning paradigm?

As L&D professionals we have lots to borrow from psychology, sociology, and plain-old curiosity to really figure out to crack the learning paradigm," said Ester Martinez, CEO & Editor-in-Chief, People Matters as she kickstarted the People Matters L&D conference in Mumbai.

She shared the example of Richard Thaler’s work which is a reflection on how we can change the way we make learning more viral. Thaler is one of the fathers of behavioral economics and a professor at the Booth School of Business at the University of Chicago, has won the 2017 Nobel Memorial Prize in Economic Science.  In his studies Thaler demonstrated that mankind was afflicted by emotion and irrationality, which influences our decision making on everything.  He showed that people depart from rationality in consistent ways, so their behavior can still be anticipated and modeled.

On this note, Ester Martinez, CEO & Editor-in Chief of People Matters shares the two guiding principles on making learning behavior-driven and guide individuals in right direction:

Principle of mental accounting: Importance of “Labelling” money

Ester shares,”All money is of the same color, or isn’t?  We behave differently to a raise in salary that to money won on a lottery – why? Because of mental accounting – different mental budgets and hence different behaviors on how we will spend them.”

Principle of Mental Accounting reflects on how an increase in income is going to change someone’s behavior. It means that people will respond to a raise at their job very differently from a lottery payout or a tax refund or a gift card given as a present. These sources of income get sorted into different mental budgets, and are saved or spent differently in turn. That, in turn, has important ramifications for policy & driving behaviours.

In recent years, development economics researchers have experimented with “labeled” cash transfers, wherein recipients get money that can be used for anything but are told it’s meant for a specific purpose. The idea is to trigger recipients’ mental accounting process, and use it to ensure the funds are directed toward the intended purpose. And, it turns out, that’s exactly what happens.

A study of such a program in Morocco found that when fathers were given money and told it was meant for school support, their children were far likelier to go to school and less likely to drop out. Actually requiring that recipients enroll their kids in school hurt rather than helped; merely labeling the money as school money was more effective than requiring that recipients put their kids in school.

Could we use mental accounting principles more effectively in L&D?

Principle on 'Why New Year Resolution fails': The planner self & the doer self is different!

How can we maintaining freedom of choice and using “NUDGE” principles actively try to guide individuals in the right direction? 

The second implication he studies was his research focused on self control - or the lack of it - Thaler touched on an age-old problem: why New Year's resolutions to change aspects of your life are notoriously hard to keep. The issue has relevance for economics as individuals' tendency to fall prey to temptation often negatively affects plans to, for instance, save for retirement.

To understand this, Thaler proposed that it’s necessary to view each individual as two people: one side of you that plans, the other that does (or doesn’t do) what is planned. The planner side of you might see perfect sense in signing up for a yearly gym membership – it expects you to go to the gym everyday and get fit. But the doer side of you might not follow through with this; it makes perfect sense for the doer side of you to repeatedly postpone the gym trip to when it’s more convenient, until the year is up.

Together with Professor Cass Sunstein, he argued that society - while maintaining freedom of choice – how can L&D leaders use “NUDGE” principles to actively try to guide individuals in the right direction? 

Learning is purposive quest to retain and improve competitiveness, productivity, and innovativeness in uncertain technological and market circumstance.

People Matters L&D conference 2019 channels to add to your portifolio of knowledge, information & opinions – for you and for your team to become the answer. 

Stay tuned for insightful stories from these sessions and gain insights on some of the best practices and solutions for your people learning. Follow #PML